The government's push to invigorate the KOSDAQ market contrasts sharply with the ongoing struggles of individual stocks. Since the beginning of the year, approximately 80% of KOSDAQ-listed companies have reported negative returns, with some stocks plummeting by over 80%. Experts argue that fundamental reforms, including the exit of underperforming companies and the restoration of market confidence, must precede any index support measures.
According to the Korea Exchange, the KOSDAQ index closed at 699.66, up 0.45% from the previous session. The number of declining stocks decreased significantly from 1,097 to 685, easing overall market pressure. This improvement in sentiment was likely bolstered by President Lee Jae-myung's proposals during a policy meeting, which included measures for the exit of failing companies and increased transparency.
However, the cumulative performance since the start of the year reveals persistent market weakness. As of the latest closing price, 1,391 out of 1,766 KOSDAQ stocks have fallen compared to the last trading day of the previous year, representing 78.8% of the total. This indicates that nearly eight out of ten KOSDAQ-listed companies have experienced stock price declines this year.
The extent of these declines is significant, with 226 stocks falling between 30% and 40%, and 24 stocks experiencing drops of over 80%. As the momentum for market recovery weakens, some investors are facing even greater losses.
Trading volume has also contracted. KOSDAQ trading volume decreased from 818.9 million shares at the end of last year to 416.8 million shares recently. Similarly, trading value fell from 10.55 trillion won to 5.42 trillion won during the same period, indicating a decline in overall market activity.
The poor performance of individual stocks has contributed to the index's decline. The KOSDAQ index, which stood at 925.47 at the end of last year, has continued to drop, falling below the 700 mark. Despite the government's goal of achieving a '3000 KOSDAQ' through capital market revitalization and enhancing KOSDAQ competitiveness, there has been little sign of a rebound in the index or recovery among individual stocks.
Challenges to market recovery include the slow progress of structural reforms, such as the exit of underperforming companies. The government initiated measures to tighten delisting criteria in July, but some companies have responded with legal challenges, delaying the process. The introduction of a KOSDAQ segment system aimed at fostering qualitative growth is also expected to be postponed until the second half of next year.
Market analysts caution that simply raising the index level will not restore KOSDAQ's competitiveness. They emphasize the need to address structural issues, such as increasing institutional investor participation and reducing the short-term investment tendencies of individual investors.
During the meeting, Hwang Hyun-young, a researcher at the Capital Market Research Institute, stated, "To achieve long-term results, a blueprint addressing structural issues must be developed. If we can outline a long-term vision and tackle specific tasks one by one, the impact will be significantly greater."
* This article has been translated by AI.
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